Tom Butt: City Council Approves Chevron Permit

By: Tom Butt

Last night, at the end of a nearly eight-hour Council meeting, I joined with four other City Council members to approve a permit for the Chevron Modernization project on a 5-0-2 vote with two members abstaining. This concludes the City Council phase of a more than three year permit application process.

For me, getting there was as hard and frustrating as any political process I have ever worked on. What we did was neither a sellout nor a triumph, but I am satisfied with the outcome.

At the risk of boredom, some perspective and context is important.

In 2008, I voted with a City Council minority to oppose certification of the EIR for what was then called the Chevron Energy and Hydrogen Renewal Project. I found the EIR to be flawed and the permit conditions too lax. Both Chevron and the City chose expediency over propriety, which turned out to be big mistake.

The five council members who voted in 2008 for the project (Bates, Lopez, Marquez, Sandhu and Viramontes) were dubbed the “Chevron Five,” and all were eventually turned out of office except Bates.

The 2008 City Council approval was immediately appealed in a CEQA lawsuit by a coalition of environmental groups led by Citizens for a Better Environment (CBE).

Chevron spent the next two years defending the CEQA lawsuit, only to finally lose in an Appellant Court decision in April of 2010. The Court confirmed that the EIR was inadequate. Construction on the project had already been halted by Court order, but now it was completely dead in the water. (Appeals Court Rejects Chevron Appeal, April 28, 2010)

The remainder of 2010 saw various unsuccessful mediations between Chevron and the appellant plaintiffs facilitated by state officials, including the governor and attorney general. By the end of 2010, Chevron appears have given up, and talk of closing the refinery or seeking a legislative CEQA waiver was circulating.

The project, however, had potential advantages for the City of Richmond. If appropriately designed and constructed, it could make the refinery more energy efficient, safer and cleaner. It would create 1,000 construction jobs, a big deal in the ongoing recession, and produce a bump in property tax revenue for the City.

Beginning in January 2011, City Council members made it clear to Chevron that they did not oppose the project but simply wanted it implemented properly.

On January 29, 2011, I wrote:

Mayor Gayle McLaughlin, Vice-mayor Tom Butt and Council member Jeff Ritterman along with City Manager Bill Lindsay have been meeting with Chevron executive this week to convey their commitment to push diligently toward a new permit based on an amended or supplemental EIR that repairs those elements found lacking or defective by the Court. No one on the City Council ever opposed this project on principle, but the Council split in 2008 over the adequacy of the EIR and mitigations to impacts, some of which it turned out were not identified or misidentified.

In March of 2011, the City Council unanimously passed a resolution encouraging Chevron to resubmit an application for a permit, but this time to get it right.

On March 5, 2011, the Contra Costa Times wrote:

Chevron's stalled plan to retrofit its Richmond refinery could be revived, more than a year after a bitter legal battle with environmentalists brought construction to a standstill.

City leaders are encouraging the oil company to apply for a new permit or an amended one this year to jump-start the project. The opponents wanted guarantees that pollution won't soar, but no one wanted the project to die, officials said.

"Cleaning up old refinery equipment, providing jobs and making the refinery more efficient and safer has been a common goal all along," Vice Mayor Tom Butt said. "There's really been no change in the ultimate objective."

The City Council last week unanimously approved a resolution encouraging Chevron to resubmit its plan, with Councilman Nat Bates absent. City Manager Bill Lindsay is expected to meet with Chevron to develop a permit process and timeline.

Repeated attempts to reach a settlement with a mediator -- and with state lawmakers nudging for progress -- failed to break the impasse before. Yet, city officials still think a project is possible.

A 2009 court ruling laid out where the project's environmental impact report erred, providing a road map for how to proceed, said Butt, who proposed the council resolution.

The parties were close to a settlement before, so a compromise is not out of the question, officials said. The landscape has also changed. The lawsuit is over; the environmentalists have won. The City Council has changed, with two new council members added. Last year, the city and Chevron ended a long tax dispute and averted an election battle over rival tax measures by negotiating a deal that provides the city $114 million over 15 years.

"We were able to reach common ground with taxes, maybe we can go ahead and do that again here," Councilman Jeff Ritterman said.

On May 24, 2011, Chevron filed an application for a similar but smaller project, and both the City and Chevron were overoptimistic the application could be processed within the year or shortly thereafter.

Ultimately, it took over three more years, largely because of Chevron’s shift of priorities to repair the 2012 fire damage but also due to delays Chevron acknowledged were in their shop.

The technical scrutiny that the application and EIR preparation received was unprecedented. The entire process cost millions, all paid for by Chevron, but accomplished by City staff and expert consultants to the City. The City’s technical consultants were the best in their fields, and the process included a level of transparency and community involvement probably unique in CEQA history, certainly for a refinery project.

The 2102 fire and subsequent investigations and penalties raised new issues about plant safety and the management culture of safety that were rolled into the EIR process and received extreme scrutiny.

As the process neared completion with release of the draft EIR in April of this year, technical experts from both non-profit organizations and government agencies weighed in on it, and as a result, it was substantially revised to include even more rigorous analysis with added conditions and mitigations. The California attorney general gave it a huge boost by recommending Alternative 11, which reduced net greenhouse gas generation to zero.

The Richmond Planning Commission raised the bar even higher by not only adopting Alternative 11 but also adding additional conditions largely requested by CBE.

Meanwhile, Chevron was conducting discussions with various councilmembers about the Environmental and Community Investment Agreement. Chevron had originally offered a $30 million package, and there was another $30 million of greenhouse gas mitigations in the proposed Conditional Use Permit.

With Alternative 11, the need for greenhouse gas mitigation as a permit condition went away, and the money was moved into the Environmental and Community Investment Agreement, making a total of $60 million. But that wasn’t enough for several councilmembers, who just two days ago finally wrung another $30 million in community benefits from Chevron, making the total a whopping $90 million.

The anchor of the agreement is a $35 million fund to provide scholarships to Richmond residents graduating from public schools in the West Contra Unified School District in a “promise program” similar to the El Dorado Promise or Kalamazoo Promise that guarantee full college tuition and fees to graduating high school students.

Depending on who you talk to, the City Council members who approved this permit are either sellouts or heroes. I don’t feel like either one. I think we got the best deal we could for the people of Richmond, and as a result, the refinery will, in fact, be safer and cleaner. A thousand jobs will be created, and Richmond’s property tax revenue will be substantially enhanced.

Richmond will eventually have a 12 megawatt solar farm on Chevron property operated by our electric utility, MCE. Millions of dollars will fund greenhouse gas reduction and sustainability projects in Richmond, creating a lot of jobs and attracting perhaps additional millions in matching grants. Job training will move hundreds of Richmond residents into employment.

Did we leave anything on the table? CBE and other organizations wanted more, but we will never really know. There is a limit that you can push anyone, even an insanely rich multinational corporation. Chevron has threatened before to sue the City for overreaching, close or downsize the refinery or go to the legislature for a CEQA exemption. All are possible, but no one knows the tipping point, maybe not even Chevron itself.

I was part of the team that negotiated a $115 million tax settlement with Chevron in 2010, and we were both praised and condemned. Some said we left too much on the table then.

All I know is that I did the best I could, spending hundreds of hours reviewing documents, meeting with staff and consultants, listening to others, including my son Andrew on the Planning Commission, and finally negotiating with Chevron as well as some of my own colleagues on the City Council – the most difficult part of all.

It takes a village. We owe a lot to every person or organization that dogged this permit process, including CBE and other environmental organizations, the attorney general, the BAAQMD, Contra Costa County Health Services, Planning Commission and surprisingly, the Contra Costa Times, for continually raising the bar. And our staff and consulting team were the best.

We also owe thanks to the RPA and the two councilmembers who ultimately abstained from the final vote. Their holding out for more stringent conditions and mitigations helped raise the ante for what we eventually achieved.

CBE believes the CEQA process remains flawed and that other conditions and mitigations are required. Our staff and consultants disagree, but I chose to side with our staff and consultants. We heard from the BAAQMD that they will be adopting new rules in the future that will deal with some of CBE’s concern’s and we can address other issues through revisions to our Industrial Safety Ordinance with fewer legal constraints.

I think we did the right thing. I assume that CBE and others will bring a CEQA lawsuit, and this could go on unresolved for months or years, but for now, I am finished, and I’m going on vacation.

- Tom Butt, Richmond City Council Member

Reposted from Tom Butt E-Forum

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